Peru's Economy
Lima Versus the Regions
How Lima dominates Peru's economy while Andean and Amazon regions lag, the regional canon system sharing mining revenues, and political tensions.
Lima dominates Peru.
Concentration
About a third of Peruvians live in Lima, which produces a large share of GDP.
Lagging regions
Andean and Amazon regions have higher poverty.
Mining canon
The canon minero sends half of mining income tax to regions where mines operate.
Problem
Regions often struggle to spend the money well due to weak capacity.
Politics
Rural voters’ frustration shaped elections, like Pedro Castillo’s 2021 victory.
The unspent canon
A mining district receives large canon funds but lacks engineers to build projects.
Thinking money alone fixes regional gaps
Capacity to spend matters.
Key takeaways
- Lima dominates Peru.
- Andean and Amazon regions lag.
- The mining canon shares revenue.
- Weak capacity limits spending.
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